HRO TODAY Oct 2013

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Contingent Labor More Than Staying Afloat A closer look at how to tackle supplemental healthcare staffing. By Ralph Henderson The last recession resulted in many hospitals and health systems launching or expanding internal float pools—a group of full-time and part-time employees willing to work whenever and wherever they're needed. This resurgence in float pools was helped by an increased availability of registered nurses, a result of both permanent positions and travel nursing assignments being at all-time lows during the recession. A well-run float pool can help a hospital cope with the constant ups and downs of patient volumes and staff vacancies. Float pools are supposedly more affordable than using supplemental clinicians from staffing agencies while providing higher quality workers. But is this really true? Let's look at the cost issue first. A recent study funded by the Minnesota Nurses Association Foundation, which ran in peer-reviewed MEDSURG Nursing, found that temporary nurses at a Minneapolis hospital cost $71 an hour while the average staff nurse salary at the same hospital was $38. The article then stated: "Therefore, it is in the hospital's financial best interest to avoid using agency nurses if possible." [86] HRO TODAY MAGAZINE | OCTOBER 2013 Such cost comparisons may be misleading—they don't tell the whole story because they only compare base wages and exclude all other employment costs. There is valid data contradicting the assertion that hiring staff nurses is less expensive than supplemental nurses. The U.S. Hospital Nursing Labor Costs Study by KPMG found that, when all labor expenses are considered, the cost of a full-time nurse is comparable to that of a supplemental nurse. The study, which surveyed senior executives of hospitals and health systems, noted, "wages and other payroll costs appear to be only part of all-in hospital nursing labor costs." It goes on to report that base wages represent only 57 percent of the all-in cost of a nurse. Comparing salaries between staff and supplemental nurses to justify a float pool is not an accurate assessment of true cost. In order to assess the financial benefit of using an internal float pool, there are many costs that must be considered, including employee benefits like life and health insurance, 401(k) savings or pension plans, and paid time off. Often internal float pool employees are paid wage premiums over core staff, and there also are incremental recruitment,

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